The ‘Real’ Uninsured

Some critics say fewer people lack access to health coverage than official statistics make it appear. We break down the numbers.

Summary

Former Sen. Fred Thompson said on "Meet the Press" that "the 45 million … figure of uninsured is probably about twice the real number of people who can’t afford insurance or don’t have access to it really." He’s not the only one saying that the number is inflated. We find that many of the numbers cited are accurate, but may need to be seen in context to get a true picture.

The Census Bureau estimates that 45.7 million lacked health insurance at any given time in 2007. But fewer lacked coverage for the full year, and more did without for one or more months during the year. All three numbers are likely to be higher for 2008 due to massive job losses.

Twenty-six percent of the uninsured are eligible for some form of public coverage but do not make use of it, according to The National Institute for Health Care Management Foundation. This is sometimes, but not always, a matter of choice.

Twenty-one percent of the uninsured are immigrants, according to the Kaiser Family Foundation. But that figure includes both those who are here legally and those who are not. The number of illegal immigrants who are included in the official statistics is unknown.

Twenty percent of the uninsured have family incomes of greater than $75,000 per year, according to the Census Bureau. But this does not necessarily mean they have access to insurance. Even higher-income jobs don’t always offer employer-sponsored insurance, and not everyone who wants private insurance is able to get it.

Forty percent of the uninsured are young, according to KFF. But speculation that they pass up insurance because of their good health is unjustified. KFF reports that many young people lack insurance because it’s not available to them, and people who turn down available insurance tend to be in worse health, not better, according to the Institute of Medicine

Analysis

Appearing on NBC’s "Meet the Press" on Sunday, June 21, former presidential candidate Fred Thompson said that the number of the uninsured in the U.S. has been overstated: "The 45 million … figure of uninsured is probably about twice the real number of people who can’t afford insurance or don’t have access to it really, who are not illegal aliens."

First we should note that the official Census figure for 2007 was actually 45.7 million. Thompson shaved off 700,000 uninsured persons by rounding down when he should have rounded up. And the figure for 2008 is likely to be higher, considering the millions who have lost their jobs and benefits since that figure was reported last August.

But what about his claim that illegal immigrants and middle-class earners who don’t feel like buying insurance are swelling the ranks of the uninsured? That theme has been popular lately, appearing in articles and editorials from the National Review Institute and Investor’s Business Daily, among others.

We’ve written before about the makeup of the uninsured, finding that according to the nonpartisan Kaiser Family Foundation, 79 percent are U.S. citizens, more than 80 percent are from families where at least one person holds a job, and two-thirds earn less than 200 percent of the federal poverty threshold – i.e., less than $42,406 for a family of four in 2007, the most recent year for which Census has figures for the uninsured. (KFF is a nonpartisan think tank that describes itself as "an evidence-based voice for people in the health system," especially the uninsured and "those most vulnerable and disadvantaged." It does not lobby for or against legislation.)

This does, indisputably, mean that 21 percent are not U.S. citizens (they’re both legal and illegal immigrants) and one-third earn more than 200 percent of the poverty level. Does this mean that the "real number" of the uninsured should be lower? Let’s look at some of the common claims.

Claim: The Census numbers are overstated. This depends on what is meant by "uninsured." The Census Bureau’s long-term Survey of Income and Program Participation found that 27.6 million people were without insurance for the entire year in 2005, and 65.9 million were uninsured for at least one month during the year.

The 45.7 million figure for 2007 comes from a different survey, the Current Population Survey. CPS asks about coverage during the previous year, but the Census states that the results are a better indication of the number of persons who were without insurance at any given moment during the year:

Census: [B]ecause health insurance coverage status can change over the course of a year, answering questions about this long reference period may lead to response errors. For example, some people may report their insurance coverage status at the time of their interview rather than their coverage status during the previous calendar year. Compared with other national surveys, the CPS ASEC’s estimate of the number of people without health insurance more closely approximates the number of people who were uninsured at a specific point in time during the year than the number of people uninsured for the entire year.

The SIPP survey, which asks the same group of people questions every four months, found that 45.2 million were uninsured in the month of December 2005, a point-in-time measurement that does indeed closely approximate the widely cited Census finding.

Claim: Many of the uninsured are not U.S. citizens. About 9.7 million of the uninsured are immigrants, both legal and illegal. The National Institute for Health Care Management Foundation estimates that 5.6 million of these are undocumented, but there are no hard data on that – NIHCM stresses that "the CPS does not collect information on legal status among non-citizens." Immigrants, especially new immigrants, are more likely to be uninsured than citizens. They are also less likely than citizens to use expensive emergency care, according to research from the Kaiser Family Foundation.

Claim: Many of the uninsured can afford private health care. About 9.1 million of the uninsured have household incomes greater than $75,000, and 10 percent (about 4.7 million) make more than 400 percent of the federal poverty threshold, according to KFF. In 2007, the most recent year of Census statistics, a family of four at 400 percent of the poverty level would have a household income of $84,812 or more.

So it’s true that many of the uninsured could, in theory, spare the $3,354 average annual employee contribution for employer-sponsored family coverage, or even the $5,799 average premium for individually purchased family coverage. But it’s also true that 66 percent of the uninsured make less than 200 percent of the poverty level according to KFF, which is less than $42,406 for a family of four in 2007. And a family’s premium costs may actually be much higher than the average for individually purchased insurance, depending on the number of dependents, the ages of family members, their state of health and the state in which they live. For instance, the average annual premium for individually purchased family coverage in Massachusetts, according to America’s Health Insurance Plans’ Center for Policy and Research, was $16,897 in 2006-2007 (before the state changed its insurance plan), and in New York it was $12,254.

Furthermore, even those who can afford coverage cannot always get it. AHIP found that 72 percent of 2006 applications for health insurance were eventually approved, while the rest were withdrawn, not processed, or denied for medical or non-medical reasons. And of those who got coverage, 11 percent had to pay a higher rate than requested.

Claim: Many of the uninsured are young people who think they’re invincible. The National Review Institute writes: "More than half of the uninsured are between 18 and 34 years of age, a group which has relatively few expensive health issues and for whom self-insuring (paying their own medical bills) makes sense." Actually, only about 40 percent of the uninsured are between 18 and 34, according to the Census.

Is this younger group uninsured by choice? KFF said young people lack insurance for a variety of reasons: "Many low-income young adults lack access to affordable private coverage since few are full-time students or full-time employees, few have jobs that offer employer coverage, and few have access to coverage through their parents."

Similarly, the Institute of Medicine reports that "adults who decline offers of [employer-sponsored insurance] … are more likely to be in poor health with high-cost medical conditions." So those who turn down available coverage don’t always do so because they’re in great health and don’t want to pay for it. Many find it to be unavailable, or can’t afford it at the price offered.

Claim: Many of the uninsured already are eligible for public coverage. That’s true – NIHCM found that in 2006, 12 million of the uninsured were eligible for Medicaid or the Children’s Health Insurance Program (formerly SCHIP) but were not enrolled. These were disproportionately children – 6.1 million of the 12 million are under the age of 18, versus only 20 percent of the uninsured as a whole. NIHCM posits a number of possible explanations: People may be unaware of the programs or not know how to enroll in them; they may experience administrative hurdles to enrolling or staying in the program; or they may fear the stigma of public assistance. Some states also periodically institute CHIP enrollment caps, which may keep eligible people out of public programs. Utah, Georgia and Florida all had caps in 2007.

Claim: The uninsured get billions of dollars worth of health care. Investor’s Business Daily writes: "The notion that the uninsured are without health care is bogus, as well. They consumed an estimated $116 billion worth of health care in 2008, according to the advocacy group Families USA." Families USA did say that, but the figure is for the total costs, including payments that the uninsured made personally. The figure also covers people who were uninsured for any part of the year, many of whom may have been covered by insurance for the remainder of the year.

Families USA found that the uninsured received $42.7 billion in care in 2008 that wasn’t paid for either out of pocket or by other private or public funds. A study by the Kaiser Family Foundation found a slightly higher amount of uncompensated care. KFF found that those who are uninsured for at least part of the year receive $84.3 billion in care during the time they are uninsured, $30 billion of which is paid for out of pocket, leaving $54.3 billion uncompensated.

The uninsured still receive much less medical care and consume fewer medical resources than the insured. KFF found that those who were insured year-round incurred much greater health expenses than the full-year or part-year uninsured – $4,463 per person, versus $1,686 for the full-year uninsured and $2,983 for the part-year uninsured, $2,601 of which was incurred while they had insurance.

In short, it’s true that many of the 45.7 million "uninsured" could find coverage through existing government programs or pay for their own coverage if they chose. Some, perhaps 6 million, are illegal immigrants who would not receive coverage under any proposal now being considered. Do these amount to half the total, as former Sen. Thompson implied? That’s possible, but we judge that the available evidence doesn’t support that conclusion.